‘Renegade’ UK could be spared from Donald Trump’s tariffs, US governor says
The UK could be spared the impact of Donald Trump’s proposed trade tariff increases on foreign imports, a US governor has told Sky News.
In the aftermath of the Republican candidate’s decisive election win over Kamala Harris this week, attention is turning to what the former president will do on his return to the White House.
Mr Trump has said he wants to raise tariffs – taxes on imported products – on goods from around the world by 10%, rising to 60% on goods from China, as part of his plan to protect US industries.
But there are fears in foreign capitals about what this could do to their economies. Goldman Sachs has downgraded its forecast for the UK’s economic growth next year from 1.6% to 1.4%, while EU officials are anticipating a reduction in exports to the US of €150bn (£125bn).
Donald Trump says he wants to impose tariffs on foreign goods
However, New Jersey governor Phil Murphy – a Democrat – says he believes Mr Trump may consider not including the UK in the tariff plans.
Speaking on Sunday Morning with Trevor Phillips, the governor said he cannot speak for the president-elect but he has a “good relationship” with him.
His gut feeling is that Mr Trump will not impose tariffs on goods from allies like the UK. “But if I’m China, I’m fastening my seatbelt right now,” he said.
Mr Murphy said that Mr Trump may look favourably at the UK after its departure from the European Union.
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The president-elect is considering offering the UK a special deal that would exempt British exports from billions of pounds of tariffs, according to The Telegraph.
“Donald Trump (has) some sympathy with the renegade who has courage,” Mr Murphy continued. “I think there’s some of that. I think that’s a card that can be played. We’ll see.”
Asked about whether UK Prime Minister Sir Keir Starmer can build a rapport with the incoming president, Mr Murphy said: “I’ve been able to find common ground with President Trump, and I’m a proud progressive, although I’m a cold-blooded capitalist, which is probably the part of me that President Trump resonates with.”
Chancellor Rachel Reeves has said she is “confident” trade flows with the United States will continue despite the tariff proposal.
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Could Brexit help Sir Keir Starmer and the UK government in trade negotiations with President Trump – who calls himself “tariff man” – and the US?
The suggestion – ironic, given the PM’s hostility to Brexit and his pledge for a “reset” with the EU – has been made by a Trump ally and confidant, albeit a leading Democrat.
The claim comes from Phil Murphy, governor of New Jersey, in an interview for Sunday Morning with Trevor Phillips on Sky News.
Murphy says he has a good relationship with Trump, who has a palatial home he calls the Summer White House, a 500-acre estate and a golf club at Bedminster, New Jersey, just 45 minutes from Trump Tower in New York.
He says his “gut feeling” is that Trump has sympathy with the UK for having the courage to pull out of the EU, “this big bureaucratic blob” and “that’s a card that can be played” by the UK in trade talks.
Really? As Trevor politely pointed out, that might benefit the UK if the prime minister was Nigel Farage rather than Sir Keir.
Mr Farage, however, speaking at a Reform UK regional conference in Exeter, described Trump as a “pro-British American president” who’d give the UK “potentially huge opportunities”.
But there’s one problem, according to the Reform UK leader. Favours from Trump will only come, he claims, “if we can overcome the difficulties that the whole of the cabinet have been rude about him”.
You can watch the full interview with Governor Phil Murphy as well as other guests on Sunday Morning with Trevor Phillips from 8.30am.
Business
US trade court blocks Donald Trump from imposing sweeping global tariffs – claiming he ‘exceeded his authority’
You probably recall the stories about Leicester’s clothing industry in recent years: grim labour conditions, pay below the minimum wage, “dark factories” serving the fast fashion sector. What is less well known is what happened next. In short, the industry has cratered.
In the wake of the recurrent scandals over “sweatshop” conditions in Leicester, the majority of major brands have now abandoned the city, triggering an implosion in production in the place that once boasted that it “clothed the world”.
And now Leicester faces a further existential double-threat: competition from Chinese companies like Shein and Temu, and the impending arrival of cheap imports from India, following the recent trade deal signed with the UK. Many worry it could spell an end for the city’s fashion business altogether.
Gauging the scale of the recent collapse is challenging because many of the textile and apparel factories in Leicester are small operations that can start up and shut down rapidly, but according to data provided to Sky News by SP&KO, a consultancy founded by fashion sector veterans Kathy O’Driscoll and Simon Platts, the number has fallen from 1,500 in 2017 to just 96 this year. This 94% collapse comes amid growing concerns that British clothes-making more broadly is facing an existential crisis.
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In an in-depth investigation carried out over recent months, Sky News has visited sites in the city shut down in the face of a collapse of demand. Thousands of fashion workers are understood to have lost their jobs. Many factories lie empty, their machines gathering dust.
The vast majority of high street and fast fashion brands that once sourced their clothes in Leicester have now shifted their supply chains to North Africa and South Asia.
And a new report from UKFT – Britain’s fashion and textiles lobby group – has found that a staggering 95% of clothes companies have either trimmed or completely eliminated clothes manufacturing in the UK. Some 58% of brands, by turnover, now have an explicit policy not to source clothes from the UK.
Seamstresses in one of the city’s former factories
Clothing industry workers in Leicester
Jenny Holloway, chair of the Apparel & Textile Manufacturers Association, said: “We know of factories that were asked to become a potential supplier [to high street brands], got so far down the line, invested on sampling, invested time and money, policies, and then it’s like: ‘oh, sorry, we can’t use you, because Leicester is embargoed.'”
Tejas Shah, a third-generation manufacturer whose family company Shahtex used to make materials for Marks & Spencer, said: “I’ve spoken to brands in the past who, if I moved my factory 15 miles north into Loughborough, would be happy to work with me. But because I have an LE1, LE4 postcode, they don’t want to work for me.”
Shahtex in Leicester used to make materials for Marks & Spencer
Tejas Shah, of Leicester-based firm Shahtex
Threat of Chinese brands Shein and Temu
That pain has been exacerbated by a new phenomenon: the rise of Chinese fast fashion brands Shein and Temu.
They offer consumers ultra-cheap clothes and goods, made in Chinese factories and flown direct to UK households. And, thanks to a customs loophole known as “de minimis”, those goods don’t even incur tariffs when they arrive in the country.
An online advert for Chinese fast fashion company Shein
According to Satvir Singh, who runs Our Fashion, one of the last remaining knitwear producers in the city, this threat could prove the final straw for Leicester’s garments sector.
“It is having an impact on our production – and I think the whole retail sector, at least for clothing, are feeling that pinch.”
Inside one of the city’s remaining clothesmakers
While Donald Trump has threatened to abolish the loophole in the US, the UK has only announced a review with no timeline.
“If we look at what Trump’s done, he’s just thinking more about his local economy because he can see the long-term effects,” said Mr Singh. “I think [abolishing de minimis exceptions] will make a huge difference. I think ultimately it’s about a level playing field.”
A spokesperson for Temu told Sky News: “We welcome UK manufacturers and businesses to explore a low-cost way to grow with us. By the end of 2025, we expect half our UK sales to come from local sellers and local warehouses.”
Thames Water, the UK’s biggest water provider, has been hit by a record fine by regulator Ofwat.
The company has been fined £122.7m following Ofwat’s “biggest and most complex” investigation.
It follows two investigations related to Thames Water’s wastewater operations and dividend payouts.
Of the total fine, £104.5m – 9% of Thames Water‘s turnover – has been levied for breaches of wastewater rules – just below the maximum 10% of turnover that Ofwat could have applied.
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Pic: istock
Another £18.2m penalty will be paid for breaches of dividend payment rules.
It is the first time Ofwat has fined a company for shareholders’ payments which do not “properly reflect” its performance for customers and the environment.
The fine will be paid by Thames Water and its shareholders, Ofwat said, rather than customers.
‘Unacceptable’ environmental impact
The regulator was highly critical of Thames Water’s handling of wastewater, describing it as having an “unacceptable” impact on the environment.
Its investigation of treatment works and the wider wastewater network uncovered failings which “amounted to a significant breach of the company’s legal obligations” and caused that unacceptable environmental impact.
The company announced a 40% spike in sewage spills in December for the period from January to September 2024.
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Thames Water boss can ‘save’ company
The fine was so large because Ofwat’s chief executive, David Black, said Thames Water “failed to come up with an acceptable redress package that would have benefited the environment”.
“This is a clear-cut case where Thames Water has let down its customers and failed to protect the environment,” Mr Black said.
“Our investigation has uncovered a series of failures by the company to build, maintain and operate adequate infrastructure to meet its obligations.”
As a result, Thames Water is required to agree to a remediation plan with Ofwat within six months.
Another investigation by the Environment Agency into environmental permits at sewage treatment works is ongoing.
Bad news for Thames Water finances
Thames Water serves 16 million customers across London and the South East and has just about fended off effective nationalisation, having secured an emergency £3bn loan. Its debts now top £19bn.
These fines were not factored into Thames Water’s financial planning for the next five years. The company’s chief executive, Chris Weston, told a recent sitting of the Environment, Food and Rural Affairs select committee that Thames Water’s future was dependent on Ofwat being lenient with fines.
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A Thames Water spokesperson said: “We take our responsibility towards the environment very seriously and note that Ofwat acknowledges we have already made progress to address issues raised in the investigation relating to storm overflows.
“The dividends were declared following a consideration of the company’s legal and regulatory obligations. Our lenders continue to support our liquidity position and our equity raise process continues.”
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